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CNN: Brand In Trouble

CNN has a great brand name, but that hasn't been enough with Fox News breathing down its neck. Now, the boardroom-level problems of parent company AOL Time Warner seem to be seeping into the CNN newsroom. The parent company has experienced plummeting financials, a depressed stock price and the recent departure of three senior executives-Steve Case, Robert Pittman and Gerald Levin. Then last week came news that Walter Isaacson was leaving as CNN chairman after 18 months, to be replaced by CNN President Jim Walton.

The larger problem, however, is that there's little buzz around the 20-year-old network that once owned the field of cable news. "We just need to market ourselves better," said Larry Goodman, president-advertising sales for CNN and Headline News. "Fox News has been very aggressive in how they have marketed themselves."

CNN has had trouble keeping its profile and ratings high when major news stories like the Gulf War and Sept. 11 aren't in the forefront, and Fox News' use of big-name personalities has enabled it to overtake CNN. "CNN's mantra was that news is the star; the network is not personality-driven," said Brad Adgate, senior VP-audience research for Horizon Media, New York.

no Effect?

Since the start of this season, Fox News has averaged 1,191,000 viewers, compared with CNN's 827,000. In the key adults 25 to 54 demographic, Fox has averaged 533,000 viewers vs. CNN's 266,000.

Even so, CNN executives claim the network hasn't really affected them. "Most cable networks would kill for our growth," said Mr. Goodman. "Fox has not hurt us at all."

Mr. Goodman said CNN's 2002 total day ratings were 30% higher among adults ages 25 to 54 than 2000, and CNN sibling Headline News is up 41% in adults 25 to 54. Both CNN and Headline News' ratings are down a bit from 2001, he said, mainly as a result of comparisons with high ratings in the aftermath of Sept. 11.

CNN has also seen its overall annual ad revenue climb 20% in the 2002-2003 broadcast year over a season before, said Mr. Goodman. Collective annual ad revenue for CNN and Headline News, according to a number of media agency executives, is $430 million to $450 million.

This would appear to be part of the equation. While Fox has significantly higher ratings, it has significantly lower advertising revenue. Media agency executives said that's because CNN has been around for over 20 years and its tenure has allowed it to build advertising prices to premium levels.

"Fox came later to the market and has a lower CPM to work off," said Mel Berning, president-U.S. broadcast for Bcom3 Group's Mediavest Worldwide, New York.

CNN's average price for its adults 25 to 54 cost per thousand is around $22, according to media agency executives. That's more than double Fox's $9 for the same CPM.